Banks must engage more with millennials, Gallup finds
BANKS are lacking engagement with the millennial generation, which needs financial-well-being services from banks, not only technology to access financial services, according to Gallup.
“We don’t see Thai banks gearing up financial-well-being service to the young generation much because they have focused on financial technology to push young customers towards alternative channels” instead of physical branches, Vibhas Ratanjee, Gallup senior practice expert, said yesterday.
The consulting and research company yesterday released the “Thailand Retail Banking Customer Engagement Report”, based on a survey of 2,401 Thais aged 18-79 who have an active personal account with a primary bank.
The poll was conducted from September 30 last year to February 5 this year.
Gallup’s report focuses on the fact that customer engagement is a key area that financial leaders need to address and improve.
It is an area with direct repercussions on Thai retail banks.
Only 24 per cent of Thai banking customers are fully engaged with their primary banks, while 61 per cent of the sample are indifferent towards them.
One of the key findings from the research is that nearly seven in 10 Thai millennials (those reaching adulthood around the year 2000) are indifferent towards their primary bank. This will pose the greatest threat to banks today and in the near future, Gallup said.
Millennials need their banks to advise them on investment and financial well-being.
If banks can cater to the financial well-being of this generation starting from when they are young, the millennials will be fully engaged and loyal to their banks.
Thai banks have been concentrating on the financial well-being of the affluent and high-net-worth segments.
Fully engaged customers are both more loyal and more profitable, bringing in 37 per cent more annual revenue to their primary banks than customers who are not actively engaged.
In the past, Thai banks focused on customers who made decisions on buying products based on rational satisfaction with interest rates, technology and convenience.
From Gallup’s research, about 30 per cent of customers experience such rational satisfaction while the rest have emotional attachments.
Emotional attachment would bring long-term engagement.
Bank branches are not dead, but banks need to become more focused on solutions than transactions.
Customers want more quality and consistency across physical and virtual channels. That means banks need to evolve from an omni-channel to an opti-channel strategy.
